Unlocking the Power of Location Data in BFSI: Harnessing its Potential for Maximum Impact

Unlocking the Power of Location Data in BFSI: Harnessing its Potential for Maximum Impact

By Rajarshi February 06, 2023 - 245 views

Location data is of paramount importance for businesses today, particularly in terms of enhancing an understanding of consumers, boosting operational efficiencies, and building competitive advantages, while enabling location-based visibility of all business interests and activities. 

The banking and financial services industry can also harness location data for improved decision-making, better risk management and identification and other purposes. 

The financial services sector can tap location data through several mechanisms, including the following: 

Scaling Up Businesses

A bank leverages this information for various aspects, including expanding the business. Data analytics and insights can help banks identify locations where they need newer branches or more market presence, and also where they should set up ATM machines. 

They can analyze customer demographic and location data for this purpose. Excessive ATMs at a single location will be an inefficient practice, shoring up operational expenditure. 

Too few ATMs in a location may also deprive customers of much-needed banking services. 

Targeted Marketing And Segmenting Customers

Financial services entities can also segment customers on the basis of their locations. This will help companies build targeted marketing campaigns accordingly. 

Banks and financial services providers can place targeted advertisements on specific products and services that are likely to be useful to certain customer segments. This will naturally boost conversion rates in the long haul.

Modeling Of Insurance Risks

Location-based information relating to climate scenarios, natural disasters, and even the rates of crime may be used by insurance providers for risk modeling in specific locations. 

This will enhance overall underwriting, while helping insurers price their policies in the right manner as well. 

Detecting Frauds

With IP addresses, geo-intelligence frameworks, and applications which are location-based, officers can also detect fraud and any patterns of unusual or suspicious transactions pertaining to specific clients. 

This insight will enable banks and financial institutions to take swift actions for addressing the issue and avoiding losses in the future. 

Location data is also useful in building overall engagement with customers. Apart from greater personalization and offering them location-specific and targeted services, banks can also use this data for push notifications. 

This will help them keep customers updated with relevant communications. Notifications on mobile phones and emailers will enable consumers to get access to offers, intimations, announcements, promo codes, and more. 

Banks can scale up engagement at a mobile banking level by tapping this information for push notifications. To make this effective, they will naturally require a solid understanding of consumers in specific locations. 

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What is location data and how does it help financial services?

Location data is any information or data that goes through processing in any electronic communications network or via any service which indicates the geographical positions of users and other related information. This helps financial services providers greatly, since they can use it to expand their business, serve customers better in certain areas, and also enhance overall conversions through targeted campaigns. 

What are the benefits of leveraging location data for banks?

Banks can benefit from tapping location data to understand locations where they need branches and ATMs. They can also come up with better targeted marketing campaigns for customers, segment customers, detect fraud and unusual transactions, and so on. 

What types of analytics can be used to analyze location data?

Banks can use predictive, descriptive, prescriptive, and diagnostic analytics for tapping the location data of consumers. 

How can banks use location data to better target customers?

Banks can make use of location-based data for targeting customers in a better manner, ensuring that customers get targeted solutions as per geographical aspects and segmenting customers for enhancing better targeting and conversion rates alike.

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